Small Business Merchants, as well as all merchants, must be ready to accept EMV enabled credit cards by October 2015. As we hear more about security breaches, merchants must protect themselves or they will be held liable for all fraudulent charges, rather than the credit card companies next year.

EMV, which stands for Europay, MasterCard and Visa, is a global standard for inter-operation of chip cards, point of sale terminals, and automated teller machines for authenticating credit and debit card transactions. As a merchant, this is the most powerful defense for you against credit card information theft. The “swipe and sign” method that we currently use will soon be a thing of the past. The “microchip” that is put on the card will require the use of a PIN number to complete the transaction. In the event that your information is stolen or compromised, the data is of no value without the chip.

This new technology is necessary and long overdue as we continue to hear of security breaches involving credit card numbers all over the world. In a recent Nilson report from leaders in the payments industry, the US accounts for almost 47% of all credit card fraud in the world. To put that into perspective, fraud losses increased 15% year over year, to an alarming 11.3 B. The new EMV technology is designed to directly defend against these “skimming” tactics utilized by thieves to gain access to the information from the magnetic strip on the back of cards.

So, as a small merchant, in order to meet the new standards, you must get a new terminal or add an external PIN pad to your existing system. In the big chains, we are anticipating that they will more than likely change their network and replace terminals. It’s expensive for the big chains, which are probably going to toss out the entire network, replacing terminals, IT, and possibly even telecom services.

As a small business operator and owner, you automatically become the “Compliance Officer” for your establishment. If you are in need of a new system, it might be the right time rather than putting band aids on a system that might not meet all of the new compliance regulations. There are many great attributes of these new systems; we can help you identify the correct system for your business. As an example, you will need a system or equipment that can handle contact and contactless transactions. This is also a good time to add a loyalty program, if you do not have one, as the new systems can easily incorporate them.

The new technology has great benefits for merchants of all sizes. It is going to reduce chargebacks and fraud. At G5, we are offering many incentives now including new terminals and POS systems that are all EMV compliant.